Yep, DMG trumps all. Because it tells the umpire not "what the rules are", but "how to apply the rules". It's like a police officer who witnesses a crime: they have the option of enforcing the law or ignoring the infraction. The GM is in the same position. I can (as GM) choose to ignore the rules and apply my own sense of "reality". After all, in my game world I'm the only one that fully knows what the Laws are (both social and physical Laws).
This is where House Rules come from, after all. If necessary, the GM announces a house rule that says "simultaneous combat is possible; I will determine if and when it applies to a given situation" and then follow the guidelines laid out on pages 24 and 25 of the 3.5E DMG...
Again - this does not apply when determining if an existing rule exists and how it applies.
The PHB is very clear (and you can check the FAQ and even CustServ if you desire) all sources will tell you that no two characters have the same intitiave.
3.5 FAQ pg
Suppose a fighter and an archer go at the same initiative. The archer is not in an adjacent square but only one square over. The fighter is not using a reach weapon. Assuming the archer plans to use a full attack action (and doesn’t use a 5-foot step), and since they have the same initiative, could the fighter move his 5-foot step (toward the archer) as the archer is firing and get an attack of opportunity?
The question is moot, because two characters never have the same initiative. If two characters tie with their initiative rolls, you must break the tie before starting the combat (see Initiative in Chapter 8 of the PH)
Now saying the DM is always right is completely different than saying the rules say such and such.
The DM is always right, but the rules may say something else.
Since this is a rules board my answers are based on what the rules say not on what the DM can rule for his game.
I have provided cited references that clearly point out "per the rules" that no two characters ahve the same intitiave and that all of a character's actions are resolved on his turn in the initiative order.
There are times when external effects may not be controlled by a character - but the OP's situation was clearly not one.
Casting a spell - is always resolved on the spellcser's turn in the initiative order (with the exception for immediate actions - but no where was it stated that immediate actions were part of the situation in question).
Movement - a character's movement is resolved on his turn in the initiative order. Since movement is either a move action, a standard action or a full round action and all three are resolved on that character's turn in the initiative order.
So "per the rules" (not per DM fiat) the situation as explained by the OP should not have been allowed to happen.
